This paper
will try to build a framework for value and utility information has in building
any successful organisation. It will highlight what roles this information play
in the success of organisation.

This paper
provides a general idea about the value which firms drive from the information
which they get from developing extensive information system in their
organisation for undertaking online business. Other part of the paper will try
to highlight the various requirements and the strategies companies’ follows in
order to develop a successful information system for the company.

General Terminology

Information
system, IT strategies, Transaction cost theory etc

Keywords

IT/IS
Strategy

1. Introduction

1.1 Overview

In today’s
era when businesses are information driven and companies are spending more and
more amount of their resources in order to get the information about their
customers, market trends and their competitors. This information hunt from the
companies requires an extensive information system which can fulfil all their
requirements of real time valuable information (Powell P. (1999)). For getting the correct
and real time information which can add value to their company they need
extensive information system.

During the
last several years it has been said that we are living in information age and
information is impacting every aspect of business sphere. The amount of
information stored in the IT systems of companies get doubled every year and
still companies are hunting for more and more information every time they get
an opportunity for getting that.

But when we
consider the case of online business then information is playing more vital
role than in the case of the offline businesses. In online business more amount
of real time information is required by the companies since the communication
process is really fast.

The Freemium-Premium
puzzle above highlights how value of information is changing in today’s dynamic
business environment (McManus
(1999)). The upper line in the puzzle shows the information
provided by the service providers to their premium customer without online
channels. This information comes at some premium price to their customers.

The line
below the premium line shows the information which is provided by the
information provider at free of cost and this information is provided through
online resources (M.J (1989)).
Though the value attached with online information is more but the price for
that value decreases down since the channel provides cost effective
distribution system.

1.2 Background Literature

Real Value of Information

The value
of information for any business is decided by the fact that how much value that
information has added for the customer, how much help it has given to carry out
the processes of the business and what exclusivity it provides to the owner of
the business (Sanden,B (2000)).
Since a business is driven by the information and valuable information can
stand a business apart from its competitor by providing the competitive edge to
the owner.

A general
framework for deciding the value of information for the business can be given as
follows:

1.Relevance (to the customers): Any
information can’t be valuable until it creates value for the customers it is
serving to. Also relevance depends upon the quality it has for the customers (Melhuish,P (1995)). Quality
relates to the appeal, accuracy, reliability and competencies of the
information. There is lot of difference between analogue and digital
information. Another criterion for determining the quality of information
depends upon the recent and urgency of the information. Since digital
information can be provided urgently and also gives updated information hence
serves both the criteria of quality information.

2.Exclusivity (by the provider): This
factor is related to the service provider, while relevance of the information
is attached to the customer who is getting the services (Rogerson,S (1996)). Since
real time information can give a cutting edge to the service provider and
proved to be competitive advantage for them. With the same information
available at many places a strong brand image of the service provider attracts
the customer towards the service provider.

3.Processing’s (IT system
capabilities): The intrinsic value of the information for a service provider is
present into the value chain of the information. Value chain of the information
here means that the production or collection of the information, processing’s
of the information, distribution of the information through various channels
and access of information to the final user of that information (Little, S. (1999)). For
example value chain of any research report sold online starts with the
production of the report, uploading of the report on web, selling it through
online channel and then access of report from the customer.

4.Channel (Information distributor):
The channel makes value of information different for the information provider.
The same information provided by two different channels has different value.
For example taking the case of the printed hard copy book and the soft copy
book (Munro, M. (2000)).
Any reader would like to pay fewer prices for the soft copy of the book than
the printed copy though the information is exactly the same.

1.3 Research objective

The
objective of the research is:

To find out the value of
information in e-Business environment

To find out importance of
information system for businesses

1.4 Research Question

The
research questions which will be explored in the study are as:

·How information smooth out the
every business function like SCM or CRM?

·How information systems utilize the
real time information?

1.5Methodology and approach

The research will be exploratory in nature in order to
highlight the value of information for the online business and will try to
develop the general frameworks and strategy in the company for building
information system. Secondary research will be carried out with the help of
historical development and research which has happened so far in this context
and main source of the information for the purpose would be various information
system journals which contain the desired information.

1.6Data collection

The data
collection process will involve the secondary research methodology where
related literature would be searched for in order to find out the information
on the value of information for online businesses. Generally related data would
be available in various journals and books which provide information on
information system in organisations.

1.7Secondary Research

Benefits of the real time information into e-Business

Since
e-Business survives on their capability to providing ease and convience to
their customer. But since the trend of e-Business is in nascent stage till now
and customers are quiet sceptical about the e-Business so the value of
information provided by the information provider increases within e-Business (Gardiner,V. (1992)). Since
the e-Business can’t prevailed without the real time information they provide
to their customer in order to make their customer comfortable and confidant in
making their decisions.

There are
four phases in which information system affect the e-businesses which are as
follows:

1.Automate: The information presented
in the initial phase of the business in processed by the information system
working as the clerical staff for the organisation (Salmela,H. (1996)). These information systems
provide improved transaction processing and greater reliability.

2.Informate: After the automation
function next impact of the information system was on the managerial functions.
They helped the organisations in the improved inventory management, procurement
process and production management as well (H-G (2001)). The impact of the information
system became indirect so it was not so easy for the organisation to measure
their impacts.

3.Transformate: In this phase of
information system scope of the information system has widened very much and
the information system has become responsible for the various business issues
like the marketing, suppliers and the customers (Hackney, R. (2001)). The benefits of this
stage were improved customer satisfaction rate and impact on the strategic
value of the business as well.

4.Transfigurate: Here in this stage
of the information system internet has changed the fundamentals of the business
in the online business processes (McBride,
N (2002)). The various benefits of this phase were the inter
networking between the various business partner and the secure network which
allowed enhanced business communication for the users.

E-Business Models and Information requirement

Various
e-Business models prevailing in the current business scenario are as follows:

Click and mortar

Virtual merchant

Bit vendor

E-auction

Catalogue Merchant

Depending
upon the above e-Business models value of information varies from one model to
other as in case of auction information has great importance and also this
information has to be routed through the secured channel in order to carry out
the processes in specific manner (Peppard,J,
(2001)). While at the same time information requirement in case of
catalogue merchant is not that extensive and on other side the value of
information for click and mortar business model is also very crucial since this
model affect the purchase decision of the customer.

Since at
click and mortar e-Business model customer make their choices based on the
features shown on the web. And then customer place order with the supplier
which are supplied by the supplier (Rands,T
(1992)). Bit vendors are web based sellers which sells their
merchandise online and their information requirement is also very extensive
since the whole business depend upon the customer information accessing
capability and ease of use provided by the supplier.

E-CRM and E-SCM

Customer
relationship is the new buzz word for the new generation business. Maintaining
the good relationship with the customer can help the business to grow in the
long term since the loyal customer of the business can give competitive
advantage to the business (Porter,
M (1006)). Also supply chain management is very crucial for
the efficient functioning of the businesses.

Now with
the availability of the real time information with the companies both the
business practices has become technology driven since the information works as
the driving factor for the businesses. Some of the important difference made by
e-CRm is as follows:

1.Develop
database driven relationship management system which is cost effective for the
company and effective in longer term

2.Online
facilities which enhances ease of use for the customers like online bill
presentment and order taking

3.Customer
online enquiries can be answered in much faster time

4.Online
transactions provides customer time convience

5.Fine
tuning the segments and offerings the products according to the customer
requirement

Supply
chain management programme are also enabled through technology by the companies
and the technology requires extensive information system which can give real
time information to the company which enable the information system. Online
supply chain management system has many advantage over the supply chain which
is prevailing from ancient time which is not technology driven (Zmud,R.W. (1999)). e-SCM
automate the business processes since in these process there is no manual
interference is required to carry out the process. As we take the case of the
order placing and procurement process in the big companies. For example
companies like Wal-Mart which everyday needs lot of inventory for their
business (Peppard, J (1996)).
So these companies have extensive information system for their business which orders
the required inventory as and when the level of inventory goes down to a
particular level of inventory and automatic signal goes to the supplier and
supplier provides the goods to warehouse. Some of the advantages of e-SCM are
as follows:

1.Formation
of team inside the company in order to process easy to use administration

2.Process
are permission controlled from the executive which are located worldwide and a
proper authority hierarchy can be well maintained

3.Products
can be modelled virtually through the technology hence the information system
can help in designing and procuring better products

4.Online
tracking of the movements of products worldwide which helps the companies to
build the just in time inventory system throughout the company which can save
the cost for the company

5.Better
inventory management system can be built using real time information for the
company

6.Automatic
order processing systems can be build real time information working as the
driving force for the system

1.8Research findings and Implications

The present
research has provided the insight on the subject value of information in
e-Business in the organisations. The information collected by the businesses
help in achieving competitive advantage to them. Since the all business
processes which were initially done manually has now a days are technology
driven. And the technology needs extensive information system which can provide
the real time information to the business. This information collected by the
information system is about the customers, competitors and market trends
prevailing in the market.

This real
time information collected by the information provide has value for the
business only when the information provided has some relevance to the customers
in terms of providing ease of use to the customers so that customer can use the
process easily with the help of this information. For the business information
is assumed valuable only when it can provide exclusivity to them in term of
service provider is known for its capability to provide the exclusive
information to the customer so as to enable its processes.

Also
information system in the organisation helps in developing a step by step
process for the providing convience to its customers. Initially information
acts as the automation tool in order to automate the business processes. After
that business processes act as the information resources and after that translation
and transfugation process is carried out by the information system and hence
information system has increasing usage for the e-Businesses and hence
information is very valuable for the e-business.

So managers
should develop the efficient information system in the organisation in order to
achieve the real time information which can benefit the business processes.
Like real time information which is taken by the e-SCM software from the
suppliers and other business partners help the company to manage their supply
chain processes which includes the processes starting from the procurement
process and ends up with the distribution of the physical good and services
produced by the firm.

Hence to
enable the e-Businesses in today’s dynamic business environment companies need
real time information for processing the information system so that faster
processes can be implemented and customer can be given convience and greater
customer value can be generated by the business in order to increase customer
satisfaction level.

1.9 Recommendations

1.
Efficient information system needed to be developed in order to get the real
time valuable system.

2.
Businesses are information driven so business should thrive for more and more
exclusive customer information so as to get competitive edge over other
competitors.

3.
Information systems should be such that they can create value for the customer
and can give exclusivity to the business.

4.
Companies need to make proper investment in their technology infrastructure so
that they can update their technology in order to get ahead of their
competitors.